O. The value ofa 25 year zero-coupon bond when the market required rate of return is 10% (semiannual) is A. $87.20 B. $92.30 C. $95.26 D. $98.31 E. None of these 11. The constant dividend growth model of stock I. assumes that dividends increase at a constant rate forever. II. can be used to compute a stock price at any point of time III. states that the market price of a stock is only affected by the amount of the dividend IV. considers capital gains but ignores the dividend yield A. I only B. Il only c. IlI and IV only D. I and II only E. I, Il and IlI only 12. Assume that you are using the dividend growth model to value stocks. If you expect the market rate of return to increase across the board on all equity securities, then you should also expect the: A market values of all stocks to increase, all else constant B. market values of all stocks to remain constant as the dividend growth will offset the increase in the market rate C. market values of all stocks to decrease, all else constant D. stocks that do not pay dividends to decrease in price while the dividend-paying stocks maintain a constant price E. dividend growth rates to increase to offset this change Latcher's Inc. is a relatively new firm that is still in a period of rapid development. The company plans on retaining all of its earnings for the next six years. Seven years from the company projects paying an annual dividend of $.25 a share and then increasing now, that amount by 3% annually thereafter. To valuethis stock as of today, you would most likely determine the value of the stock years from today before determining today's value ? c. 6